Skip to main content

tv   Telecommunications Policy Executives Panel  CSPAN  March 22, 2014 4:50pm-6:22pm EDT

4:50 pm
were making. i used to complain to my mom when she was going to school and working. why are we eating the same thing every night? [laughter] doing so muchs and then coming home and still taking the time to make sure i had a decent meal. built this country. those kinds of sacrifices. we've got to make sure that we as a country are helping people who are so courageous and so brave and working so hard. andthose moms and grandmas women like carolyn who are trying to start their own business. a long way together over the past five years. we have to do more to restore opportunity for everybody, whether you are a man or woman, ,lack, white, native american gay, straight, with or without disabilities. all of us have something to
4:51 pm
offer. all of us have a place in the american story. as long as i am president i will keep working to make sure every single one of us has a chance to succeed. we say you can. thank you, everybody, and god bless. [applause] ♪ >> president obama leaves sunday night for a five-day trip to europe and the middle east. andonday, the netherlands the hague. he will be there for a discussion on keeping nuclear material out of the hands of terrorists sent he will attend a nuclear security summit on tuesday. the president will travel to brussels tuesday evening and wednesday will take part in the ee you-u.s. summit at the council of the european union. with thelso meet united nations secretary-general anders fogh rasmussen. on thursday the president will meet with the francis at the
4:52 pm
vatican before wrapping up his trip in saudi arabia. executives from verizon, comcast, and at&t talked about the future of telecommunications and the upcoming spectrum auction. this is part of the free state's foundation -- the free state foundation's daylong conference in washington, d c this is about an hour and a half. >> when commissioner cliburn -- n commended as for efficiency, i was not sure if she was talking about us. everyone here is efficient and is right on time. i will accept that complement and get started right here in just a moment.
4:53 pm
i want to make sure everyone is miced up properly. ok. well, welcome to the first panel today. of ourif there are any c-span audience has just joined us, i want to welcome you as well out there. i said earlier -- and i will confess any more about this -- i am an admitted c-span junkie of the first-order. i am particularly glad to have c-span with us today. so, this is the panel that i panele senior executives'
4:54 pm
, for good reason. everyone sitting before you is a very senior executive area -- very senior executive. and we are going to do this in a very conversational format today. they know that as well. i am going to do my best, and i think i can do this, to prevent long filibusters and make sure we cover a lot of grounds. about that. you will all find out about there is a lot of ground really to cover today. to do is --m going you have the brochures with you. each member has a very distinguished bio. but i am not going to take the time to go through that. i am going to give you your titles. theman bing them or google
4:55 pm
and find out a lot more. when i tell you what they are doing in their current positions, that will give you a sense of the expertise they bring to the table. just in alphabetical order -- rebecca arbogast. rebecca is vice president him a policy at comcast. sitting next to rebecca is james , the executive vice president of the national cable and telecommunications association. i should say james is filling in a bit for michael powell, who a few days ago informs me unexpectedly he had to be out of town. i appreciate james filling in. he has not had the two months the others have had to prepare. nevertheless, i don't have any
4:56 pm
fear that the cable association is in good hands. .ext is jim cicconi jim is senior executive, vice president, and external legislative affairs for at&t. is then sitting next to jim steve largent. now, i am going to break my own rule here for just a moment. really with regard to steve -- as many of you know in this , the steve has led ctia wireless association for over 10 years. i think that is correct. over 10 years. he announced a few months ago that he was stepping down to resume his football career, which he did not say he wanted to spend more time with his he is not going to resume his football career.
4:57 pm
i'm not sure what he is going to do. i'm anxious to find out when that happens. whatever he does decide to do, steve will do it in the same way that he set records in the nfl, which got him into the nfl hall of fame, and in the same way . i think thetia record of success for the last wirelessth the industry sort of speaks for itself. i do not want to step on any of his answers that he might give. so, i'm going to leave it at that, steve. but we're glad you are here. and the fact that you are stepping out does not mean that you will not have to come back in the future as well. i should say for those of you -- this very tom was on same panel and he was stepping
4:58 pm
down. i took the liberty -- i have known tom for long time just as i have known steve, commending tom for his work. any of you guys are stepping down next year, i might do the same thing, but i can't make any promises. >> are you going to talk about my nfl career? >> i will have to do some googling for that as well. i am going to have to check into that. that brings us indeed to craig sullivan, and he is the senior vice president for public policy and government affairs at verizon. with that, welcome, distinguished panelists. to be throwingng questions at the panel. not necessarily going
4:59 pm
to have to answer all of the questions. if you want to say something, you can let me know. for many of them, i will certainly welcome comments from all of them. the first question i am going to ask, and this will test and demonstrate my resolve to remain in control of the panel. the naturalow tendency. i have been there myself. here is the question. from the perspective of your company or association, what should be the single most important priority for the commission, with the emphasis on single most? i'm going to start with rebecca. just go right down the row on this, and just, you know, take just a minute or two. rebecca? all ofk you for inviting us here to have this
5:00 pm
conversation. i do think conversations are important. i'm going to answer that quickly with a very short historical story that was triggered by an event a couple months ago where the digital pioneers thomas the folks at the fcc when i started their 100 years ago, were being honored for their foresight at the time they were developing policies when the internet was starting. powell and bill snark, both of whom i work for, thathis wonderful approach was to stand back, let this new thing breathe and grow, and the way bill put it was, the high-tech hippocratic oath. first do no harm. then michael talks about the wings for some event and they talked about the term "digital restraint." heartook very close to the need to keep an eye on things, but to step back and let this thing grow and evolve, and
5:01 pm
they concluded that this approach was much as it was when bill pointed in 1999. you do not know when -- where things are going to go. that approach, which is in contrast with a lot of the european countries has served in terms ofy well investment and innovation, and the single most important thing is to continue that trajectory thatemain faithful to historic park, because it is important for jobs and economic development. >> james, the single most important priority from your perspective? >> i don't get could say it much better than what rebecca did. my two words were going to be regulatory humility and it's based upon that same notion. energyad this tremendous
5:02 pm
in the last two decades because we recognize the constantly evolving and changing nature of the internet and internet technologies. we are not talking about something where we pour concrete and it hardens and that is where it is. it's just going to be that form and it is constantly changing. and we wanted to constantly change, because that is what toves innovation that leads providing all the new services that consumers enjoy. when we look back at the past two decades and where we were and where we are today, our biggest challenge -- or the biggest challenge for regulators , i think, is to continue to have that economic engine go forward. and as a record said, do no harm. >> jim? >> i think it is the ip transition. and it's not just because the fcc is challenged with
5:03 pm
navigating the technological change successfully. i think it really tees up a larger question for the agency, the ip transition really challenges the agency to modernize its entire approach to regulation. awarek we are all pretty of how dramatic the changes in the industry have been in the past decade. encouraged that chairman wheeler and the commission have decided to tackle this pretty immediately after he assumed the job, in fact. and i think tom wheeler is the kind of guy that i think understands the challenge and the difficulty of altering the culture and the approach of an agency. i think that is the biggest challenge that they have, really bringing the fcc into the 21st-century and updating its entire approach to match the
5:04 pm
realities of the marketplace. you, jim. considering its 2014, and probably not too much to ask that they get up to speed in the 21st century. steve? >> randy, i have to say, after that introduction, my stock goes downhill with every moment that i speak. i'm better off just passing to greg. i do want to say that when my wife and i go out to dinner and they asked me what i want to eat, my first response is always "spectrum." [laughter] priorityis our highest that we have and it will continue to be. we began the debate about spectrum that is coming to and itnow back in 2008 is the fastest that spectrum has ever come to market in terms of moving this debate along. they holdthrough 2014
5:05 pm
the age block. it was a successful auction. they will come up with others, three later this year in the third quarter. nme have the broadcast spectrum auction that will be held by mid-2015. i applaud the chairman for getting the spectrum out to the marketplace. it is something less than 300 megahertz of the president 500 megahertz that he called for a couple of years ago. we certainly applaud him for that effort. andant to continue to push get the spectrum as quickly as possible, because the bunnies like the two gentlemen represent on either side of me are using the spectrum for new and varied uses. and the people who stand to gain the most are consumers that are now over 310 million in this country. we want to see that continue.
5:06 pm
>> thank you, steve. craig? single point, my i will agree with steve. it is spectrum, spectrum, spectrum. areas wherese are the innovation and the investment in the industry and the technological progress are going to bring tremendous consumer benefits, and really what we are looking for as policy makers is to stand back and let that innovation innovate -- innovation of spectrum take place. to takepolicymakers affirmative action. spectrum is the lifeblood for the innovation that is taking place in this industry. this is an area where the spectrum needs to get into the market place or it is going to choke off that investment and that innovation. and by the way, this is not just a rule for the fcc. the fcc is doing a good job in getting some spectrum out. we have three spectrum options
5:07 pm
-- auctions that have teed out in a four-month timeframe with -- after going years without having any. there is a strong role for congress here, too. it is controlled by lots and lots of different agencies, lots of different entities. that makes it very difficult to get the spectrum identified clearly and move it out. there are rules for the fcc, the commerce department, and for congress in getting the spectrum in the hands of the industry for it to be best used. >> thank you. the second question is going to be a bit of a softball, too. and then you may notice that there will -- they will get increasingly more difficult. here is the second question. this comes from today's
5:08 pm
washington post crossword puzzle. its numbers -- you will be at a disadvantage if you have not seen it. it is number 63 down. you can check it out. i've got it here. is, government regulator of radio and television and it is three letters. who can answer that first? [laughter] i guess they can all answer it or not. my wife is an avid crossword puzzler and she got it right away. fcc. i was just grateful it did not say government regulator of the internet. i think that was good. this.he next question is just sticking a little bit with the institutional side of things -- what do you find most
5:09 pm
tomuraging about what wheeler has done so far at the commission, and what do you find most troubling about what he's done at the commission? and keep in mind that our theme today for the conference is "a new fcc" and we talked earlier about the new chairman of that. i want to throw that out. and to some extent, it may coincide to some extent with what you said about your party or not. just go down the line starting as far as what you might want to say in response to that. >> from the very outset, chairman wheeler has been talking about the rules of competition. i think it is encouraging that he has recognized that the technologies have changed, the markets are changed some of the fundamental policy ecosystem has changed -- the markets have
5:10 pm
changed, the fundamental policy go system has changed since the rules were put in place. and ultimately, regulation is meant to be surrogate for when competition does not exist, but we will look first to competition. that is tremendously encouraging. we will see that acted out in practice, but as far as a philosophy that he has laid out as a cornerstone of his regulatory approach, think that has been tremendously encouraging. randy said, we cannot just say the good without the disappointing. as far as what is disappointing, i would say what is most disappointing is not something chairman wheeler has done, but rather something that has not been done yet. and for me, that is updating the spectrum screen. the spectrum screen, in theory, is a great tool. it is something objective. you lay out the total amount of spectrum in the industry. you lay out a clear and objective standard of where the limit is, under which there is
5:11 pm
safe harbor for anyone company to own's eckstrom in the market. -- to own spectrum in the market. and that should provide clarity for transactions. has not beens, it updated. there are huge swaths of spectrum, particularly held by hold morewho o spectrum than anybody else in the industry by a long shot. within the spectrum screen itself, you take now a tool that should be clear in its objective and allow companies to make investment decisions with clarity and you have thrown in an unknown meant -- in an element of uncertainty. it is more than just a particular issue. for me, an area that is so potentially objective and clear -- there should not be any real question around interpretation. this is not a big goober policy question or math rule. you set a roll and you apply it.
5:12 pm
and yet, the fact that it is so clearly results oriented he comes a question of institutional integrity. if this jewel that is so potentially objective and clear is being -- if this tool that is so potentially objective and a certaineing used in concerns it lends about clarity on hold other set of issues. how you arest about managing the spectrum astro -- assets in this country. it sends a signal that says, we say this is what the policy is, this is really how we implement it. but thanks for that. and to illustrate how we are going to have around today and make this completely interactive , i want to follow up on that and then we will come back to the general question. but i know that in the last day or so, the spectrum screen has , because he was
5:13 pm
employed recently with the at&t league transactions. i want to take issue in this -- with you in this a bit. that as opposed to a regulation that was adopted in cfr, i think the inherent intent of this is that the commission use it as a trigger. but then it "looks at other factors. factors."at other it has that goes into it as opposed to a rule. i mean, that's the way i view it. adopt a be better to regulation that would be more binding in the sense that a
5:14 pm
"screen" is not intended to be, at least in the commission's mind as opposed to yours from the beginning? as i said, i believe at&t was just recently -- the issue came up with them. at all withagree what i just said about a rule versus a screen, but i wanted to ask him about that and then we will come back to you, craig. >> we think a rule is warranted. we have argued for that for a couple of years now. think there is merit in having a screen. and i think it is supposed to work as you've described, randy, which is it provides company some certainty. you know you are under it.
5:15 pm
and if you are over it in any particular market, then there are added layers of scrutiny that the commission is going to subject it to. what is a little disturbing to us is that there seems to be a tendency now, and we commented on this on friday. tore seems to be a tendency not, in fact, view the screen as a safe harbor, but to even raise questions if you are under the screen. is really athat notion that calls in to question the entire reason for having the screen. if there is no certainty that any company has in terms of their spectrum holdings, then it's going to jam up the ability, at least in the secondary market, to operate effectively. if you are under the screen, yet you're still not somehow safe, then i think it really raises
5:16 pm
thequestion as to whether commission isn't just kind of making it up as it goes along. companies need certainty in these areas. companies tolows invest in the secondary market to work. when you know you are under the screen. we want to at least raise that question on friday, because i do think it should be a safe harbor. and i think if you put it in a rule, then that ought to be one of the aspects of the role. -- the rule. >> steve, do you have a view on this question of screen versus rule, or how the commission administers the screen? i should say, as most of you know, steve is -- at least in my view, being the head of a trade , i mean, probably
5:17 pm
was more difficult getting in the hall of fame with all of the different interest in pulling in different ways. do you have an opinion on the screen? >> instead of scaring -- focusing on scarcity, we need to be focusing on abundance. we need to not be worried about how much spectrum you have, but keep blowing out more spectrum in auctions another way. that would be my overall view of this. >> james or rebecca, do you either of you have anything you want to say on the spectrum screen specifically? >> no. electing i would add on the spectrum side is picking up on said abouthat was the importance of getting unlicensed spectrum out there, too. i think the commission has paid a lot of good attention to that and we are hopeful that we'll get out there, too, to provide
5:18 pm
what we all need for wi-fi. >> i have a whole set of questions that we will get to. we will get to some of them on spectrum as well down the line. this is just a little diversion. we will come back to that. i just didn't go down the line -- ask whether anyone else and i would appreciate comments if you have any. this could be a good soundbite. what do you find most encouraging about what chairman wheeler has done so far at the commission, and what do you find most troubling? >> in just a few words, i would say i applaud his effort to continue to push to get spectrum auction. is, mytion i would say hope is that -- particularly with tom coming in in the
5:19 pm
position that i was in just 10 years ago, that they would exercise juliett the fcc. that is yet to be seen that will happen. exercise humility at the fcc. and that is yet to be seen that it will happen. tom may be watching right now on c-span, we hope. [laughter] -- mr. starkg onie? >> i would say most encouraging thing is that tom has brought the commission -- has brought to the commission a very refreshing attitude and approach. he has brought a really stellar team in there with him, people that we all know and respect and i have worked in this industry for long time and understand the issues. you've got a really high-quality team that he's brought in their that reach out, listen, and they
5:20 pm
act. of getting the job, the chairman took up the ip transition petition that we have filed over a year earlier and it had just been sitting there and acted upon. and bob acted on it and did it the first subsequent meeting they had. that is really encouraging to see at the agency. it's a really refreshing approach. i'm sure, by the end of the year i will find some things that trouble me. but so far at least in the month he's been there, i have not seen anything yet. >> james, do you want to comment? >> i would just echo what jim said, personnel. he has adopted some of the best al and i know of -- some of the
5:21 pm
best town and i know of to work through a lot of these issues. and he has brought some boldness and decisiveness. he clearly wants to -- i think he knows clearly what he wants to accomplish and he has had about a, wishing it. he has used blogs and we have seen this in a lot of his philosophy, the willingness to use industry to work together the societal issues and the problems that are separate and apart from regulatory responses. and on any particular issue we may have issues and believe that it is pattern. when we hear about a problem and we feel the need to regulate it,
5:22 pm
that is refreshing. as tom wants to look at all of these issues based on the facts and circumstances brought before the agency come a that they will continue to do that. >> rebecca, is there any issue that you think the cheater has tottered? tottered? has that is a new one for me. if you have a comment, why don't you offer it? >> just to demonstrate that we actually did not coordinate our answers before, i identified exactly the same things that the to james's had done. it says a lot about a person when you look at what people surround themselves with to guide and advise them. i cannot think of a better group of people that he has brought in. -- than what he has brought in. at some point in the next 10 years, the bandwidth to focus
5:23 pm
on, the last half of the chapters of a national broadband are, all of those what called particles are important for health care and public education and safety. i see an ability to move in that direction. >> thank you. i should say as all of you know up here, and most of you in the audience, from my own , i found many encouraging things as well. but also things i am troubled by. i will not say anything about read the free state foundation blogs and papers and all of that, and then you can find out what we think at the free state foundation. one of theabout really important issues that i a lot of what is happening at the commission, or may happen in the future, and that is, net neutrality.
5:24 pm
sometimes, someone to call it open internet. sometimes people don't want to talk about it at all. but in my view, it is important that we wrestle with some of the questions raised by that. just so everyone is on the same , what this question particularly involves, and especially after the d.c. circuits decision in january, to the extent of the fcc ability to .egulate broadband to start is all off with this question and to hear your comments, i want to quote craig aaron, resident of -- president of free press.
5:25 pm
"this ruling means the internet users will be pitted against the biggest phone and cable companies, and in the absence of these companies can now block and is committed against their customers can .ndications at will we are disappointed that the court came in -- came to this conclusion." to my mind, it seems clear to ,e, absent a further appeal that under the d.c. circuits opinion, the fcc lacks authority to impose the very same regulations that they had put in where the court said it amounted to common carriage. the court also said in its
5:26 pm
opinion that pursuant to a famous section 706 in the act and inons conjunction with what verizon in its appeal, and the dissent as well by the way, referred to as the triple cushion shot theory of broadband deployment. theeems clear to me that fcc possesses some authority to , andate internet providers possibly fairly broad authority. my question is this, short of the very same net neutrality rules that the court has struck down, let's assume that is not going to happen. and just assume, i know all of you i think our opposed to
5:27 pm
reclassifying internet broadband providers under title ii. if anyone is not, please raise your hand now. that being the case, the question really is this. how do you envision the tryission can or ought to to prevent "discrimination" against edge providers and ?ontent providers which seems to be its principal objective in adopting the rules in the first place. comment on that. will probably keep alternating. i may go to the middle one time, but i will start with rebecca. i think, rather than get into the needy gritty of the -- the
5:28 pm
nitty-gritty of the various legal ways that the commission may get from a doozy -- get from , the high-level points to keep in mind are the way -- the way the court interpreted 706 is really quite generous. if you take the triple cushion shot theory, and i'm sure we've all played parlor games internally on the range of things that might be done under that. one of my favorites is ordering silicon vector of -- silicon valley executives to never retirementtake their at age 35 and then keep working. you can go a long way with that. i don't think this chairman will do that, because he has a lot of other priorities.
5:29 pm
spectrum and the i.t. transition. he will probably want to keep closer to the concept that michael powell identified with vigilant restraint. my instinct tells me that what comes out of this rulemaking, whatever the preceding is going to be, it will be something that is very close to those original principles articulated very -- years ago that were basically followed. what i was struck with in the court's opinion was judge all ofan's dissent about these many transactions that .ave happened over there years you can count on one hand, literally, for the people site. that was a remarkable grounding. >> to mix it up a little bit, i will give it to craig. and i will just keep mixing it
5:30 pm
up. remember, those of you in the #dience, the twitter handle fsfco. we will save some time later for questions in the session. you commenton't next? and generally, we are going to try to limit the so we can have a series of questions. but i want you to answer, particularly the question of why did for eyes and decide -- of why verizon did not decide to appeal the d.c. circuit's decision. >> certainly, the fcc -- to answer the question of why we chose not to appeal goes to why we brought the appeal in the first place. desires to do with the for clarity around the fcc's jurisdiction to impose relations
5:31 pm
on the internet. i noticed evene, when you asked the question and you read the craig aaron quote, the question talks about users. the question talks about the edge providers. i think we should be clear on thereing, which is that is sometimes a misconception that these rules have always been with us since the dawn of time, like that opening scene in 2001 space odyssey. there are the rules and there is this cloud is -- cataclysmic change in the industry. it is not like that. they have been there for just a couple of years. what has been protecting consumers for two decades now is the fact that our incentive is to provide users connectivity how they wanted, where they wanted, when they want it. competition in providing consumers what they want is what provides the protection for consumers. nothing changed in terms of how that was working when the rules
5:32 pm
were passed. nothing changed when the rules were struck down. i want to be clear on that. they are two different issues. one is the open internet rules. the other is the jurisdictional underpinning that the fcc looks to him promulgating these rules. the reason we want the appeal is that we were concerned about this broad, jurisdictional claim -- this broad jurisdictional claim by the fcc that would allow it to regulate wide swaths of the internet ecosystem. as this case has gone through and this has become an empty vessel into which lots and lots of ideology has been poured, which isith -- much of unrelated. i agree with what rebecca said, that it is clear that the fcc has broad research and regulate many parts of the ecosystem under the court order. is not our top priority. our top priorities are spectrum.
5:33 pm
this -- there are other areas we want to focus on in this has become a distraction. look toy need to congress. regardless of what you think the fcc's role should be in regular dating the internet, whether you think it should be minimal or expansive, you should be somewhat troubled that the way the system today is people sort of saying, well, if i read this into this court's decision and what congress's intent may have been here, through that we will define what congress's intent originally was. that is a very kludgy way to get to this resolution. back and havestep policymakers look at this realistically and right a regulatory regime to protect nots on the internet and
5:34 pm
further distract from priorities. >> let me throw this into the mix, just add a comment. wordse you used that "internet ecosystem" couple of times, and even holistically. whatsappjust purchased for $19 billion, that is, billion dollars. us, the question might be what is whatsapp? that was my first question. but whatever it is -- and i do know something about what it is now -- i have read that it is taking away business, potentially a significant amount of business from the broadband providers like verizon, for example, or maybe at&t.
5:35 pm
is, should whatsapp be regulated in the same form as companies"telephone , and thecompanies section 706's extent reach that far? james and then jim. >> i really don't know what whatsapp is. i will trust you on that. i would echo what rebecca said. outcase pretty clearly sets a fairly expansive view of section 706. i think it is important that we parse through what the fcc could do versus what the fcc should do . there is a big distinction between the two. i do think, maybe going back to ,our original question, randy
5:36 pm
it is important to divide the legal issues that were teed up in the case versus the policy -- whatf what the root the correct regulatory policy should be. for many of us, we believed the verizon case was going to be about the ancillary authority and how far that extended. we are throwing that a little 706.f a curveball by a lot of folks did not believe 706 could convey the direct authority that the court -- at least a divided court -- found. but it is the law of the land here in the d.c. circuit. is correctly interpreted as something more than nothing and truck -- and something short of common carriage. it will be up to future decisions and future fcc rulemakings to determine what the contours of the -- of what
5:37 pm
that legal authority is. aside from the legal questions, i think you have to go back to the underlying policy question of how we are going to regulate, given all of this robust competition that exists not just among network providers, but also with varying levels of the internet ecosystem stacked. maybe this goes to where craig a new statute.rd when we look at the statutes that we have, so much of what we have is based upon the premise of a monopoly provider. in 1992, cable was 98% of multichannel video universe. at&t used to be the only game in town. we live in a very different world now. to the companies represented up here and in the audience, a lot
5:38 pm
of the innovation that has therred has occurred around obstacles and statutes provided. but at some point if we want to rationalize the statute with the thinking in the world today, we need to rethink the basis -- the bases for these rules. start with the role and try to address your whatsapp question. at&t doesn't block any legal content. we don't discriminate for or against any particular content. that is the main reason we really have a problem with the original rule. and i trust that whatever the fcc does in this proceeding will be narrower than that. hopefully, we will not have an issue with that either. thinkrger question that i the whatsapp example tees up is this.
5:39 pm
a levelou ensure playing field in this zone, when you do regulate under 706? confronted fcc has this, or is confronting it to some extent right now in the text messaging area for example. there are 911 requirements. to impose a 911 requirement on at&t or verizon or sprint or somebody, you really have to do the same thing with the text messaging service offered by apple, for example, on the iphones. a consumer, when they go in and send a text and presses that button is not necessarily thinking about who is behind the curtain on it. they expect to be able to get to 911. trying to figure this out and how to address it. the key is, if you are providing one of these services, which
5:40 pm
increasingly will be delivered over ip. they will be very difficult to distinguish one from another based on who provided. if you're going to have regulation in that area, it's going to have to apply equally to make any sense. if you're going to put regulations on an ip voice provider, which we all will be, then you will have to deal with an issue like skype or something like that. if ae end of the day regulation is justified in a particular area, it will have to be applied to all. that is the challenge the fcc is really going to have. but i also think it is probably a good reason for them to be very cautious, because the whole point of it is when you've got all these competing services, in theory, the market ought to be able to address as many aspects of these things -- address many aspects of these things without
5:41 pm
the rules. 911 would be an exception to that, but hopefully would bring about the regulatory humility that james mentioned earlier. >> thanks. and by the way, toward the latter part of the conversation, i probably want to end by asking you about your thoughts briefly .bout a new communications act and in that context, we can much about whether -- how the fcc can do it self now or how much might be done in a new act. steve whether ask he has any comment on this net neutrality question. but actually, i'm going to throw in one more wrinkle. and if you want to, you can do regionalor just the question. and maybe others can help me out on this as well. before the d.c. circuit decision , i think it was assumed by many
5:42 pm
-- at least, i was one of these. a predicate for the commission exercising any informative authority at all under section 706 was a prior finding by the agency that broadband was not being deployed on a reasonable and timely basis. that was a reading that was widely accepted. ,he fact is, most of you know and only very recently did the switch andt of a make a determination that broadband was not being deployed on a timely basis. and in so many of us thought, myself included, that it might of been done possibly to bolster whategal case concerning
5:43 pm
706 meant if it were challenged in court by people like craig sullivan over here. becauseo throw that out as i read the decision, it seems like there has been a complete decoupling of the finding from thent determination about the commission's authority. it's a little bit puzzling to me. steve, why don't you go first come and then if anyone wants to thisnt that might resolve question in my mind, i would welcome this as well. >> let me say first of all that 90% of consumers in this country today have access to three or more wireless carriers for wireless broadband. consumers in the united states have access to at least two wireless providers for wireless broadband. the fact is, healthy competition
5:44 pm
is taking place and consumers have a lot of choices when it comes to broadband. what i want to say about the whole net neutrality debate that came up about six or seven years that -- i was in congress for eight years. i have been at ccia for over 10 years. debatingver seen a congress or anywhere else, the fcc, or just in the public in general, that has been carried forward that long over what rebecca said, for cases of net neutrality that were alleged violations. have never seen that. nobody's life is at stake. issueis has just been an that will not go away. and yet, i'm not seeing any harm. there are a lot of issues that we need to work on at the fcc and within the wireless industry and within congress and
5:45 pm
everything else. but i just don't see net neutrality rising up to that level of urgent need, we've got to fix this to my because this is a problem. because it is not a problem. we've got companies appear that we have a free and open internet. and they've always said that. i just don't see what the debate is about. we have a number of things that we need to have a healthy debate about. network neutrality is not one of them in my opinion. jim was raising his hand. if you have a quick comment on finding,upling of the i would welcome that. i think a lot of people in that thestry recognize fcc did an about-face on the finding of broadband been deployed on a reasonable and timely basis. it was probably a finding of convenience.
5:46 pm
it is certainly at odds with the fcc's own data. and frankly, it becomes even more out of pace with the available data. , thethink at some point courts are probably going to step in. that a smartly person wrote something to the effect that it is really hard to congresshe praising chose, which is reasonable and timely, and interpret it immediate and today. that is not what reasonable and timely means. and it is certainly not what congress intended. i have to believe that the fcc -- if the sec -- if the fcc continues to press this, at some point the issue will be promulgated. i have a hard time seeing a court interpret it as, you need to be everywhere at once or it is not reasonable and timely. i have a hard time seeing that, and frankly i think the congress
5:47 pm
would as well. to ask maybe two more questions in this area and then we will move on to another area and i will ask the panelists again to keep the .esponses reasonably short that is by my definition, not the fcc's or something like that. something -- a question that arises over and over. there are some people that claim -- i could cite our friends over at free press again. because investment in broadband facilities has been robust in the past several years, or decades, and i think you all would say and have actually touted the robustness of the ies,stment of your company' that this proves the adoption
5:48 pm
of the net neutrality relations, or even the overhang of potentially title ii regulation or any other regulation, that it as anot chill investment claim -- as you claim that it chilled investment. how do you respond to this? i will call on craigie, and maybe we'll get another response or two and then move on. , since younded started by invoking steve's nfl career, those weights that they put behind running backs when they are training and you say, the running back just made it all the way down the field dragging 100 pounds behind him, so it must not have impeded him. you cannot conclude the first from the second. two points. one is, you cannot think it coincidental when you look at the investment flows and there seems to be a correlation between where investment goes and regulation. really, wireless has been exited from the regulatory environment.
5:49 pm
-- has benefited from their editorial environment. if you look at the market, i don't believe that the predatory environment has no impact. in fact, i know from sitting in a company day in and day out and seeing business case decisions that are made, the level of regulation is absolutely a factor that is taken into account. the second thing is, we tend to be deterministic on these and say the technology that we have today is the to not -- is the technology that there would have been and we cannot imagine an alternative future. and we do not also think about the levels of innovation. i sometimes point to the postal industry. had you a number of years ago said we should have postal neutrality, that would have sounded very rational and logical. because neutrality has to be a good thing. 20 years later, we would not have had next day mail or bulk mail. you would have just dropped things off at the post office and everything would have been treated equally and you would
5:50 pm
not have known there was a possibility that i could have paid a little bit more to have next day mail. you would not have known what you would have foregone. of healththe areas and education and energy management that may have been developed and innovated in with areas of later touch regulation? to cannot point factually something that does not exist. it is false to say that because some innovation to place no other was impeded because of this regulation. toi want to transition another area. >> can i make one brief comment on that? if you don't think regulation impedes investment, then why isn't google fiber offering more service? >> that was due to the -- dutifully brief. rebecca, do you have a comment? >> i'm thinking back on the 10 years i spent on wall street. investors are not particularly worried about net neutrality. they see that we have all been living with it.
5:51 pm
and title ii is something completely different. many of us remember the day that julius announced he was going to do title ii and saw the stock market react to that. people should keep in mind and watch, because it is interesting. it is hard to shift entire industries back and forth between regulatory regimes. it is inefficient. and once you go on a particular course, it's very difficult to unwind it sometimes. but i think we have a natural experiment that has been going on for about a decade now between the u.s., which did not apply these rules to internet systems, and the eu, which did. -- theok the prettier pretty aggressive predatory regime that everyone was applying to the telephone network and extended it over to the internet network. you see clearly happening over that timeframe is the investment shifted out. investment and jobs growth happen in the u.s. and
5:52 pm
investment and jobs growth decline very seriously in the eu . and then in australia, i think, you have the third model or approach to this. they did the same kind of resale competition approach that the eu did and found they were not able to get the investment they needed, so a few years ago decided to decommission the private plans and do a government owned network. it will be interesting to watch that play out. it's too early to know for sure, but they've had a rocky start. i think watching those three different models and where the money flows, because anybody knows that money can go wherever it's going to make profit. the investors are watching that closely. >> those are valuable insights from a former investment analyst. thanks for that. when i started this panel and "washingtontoday's
5:53 pm
post" crossword puzzle, number 63 down, where the answer was fcc, i just looked up at our conference logo up there. it looks like a crossword puzzle or something. i think those people at the post must have gotten that idea from us. here's the next question. thewheeler, in reacting to net neutrality decision came out just a couple of weeks ago listing a bunch of actions that the fcc might take. i just want to focus on only one of those. under the heading of enhancing competition, there was a suggestion made. it was not necessarily explicit, but at least it was read this way by many, that one of the things the commission might do to enhance competition in the broadband space is to act to
5:54 pm
preempt state bans which restrict or other eyes -- or otherwise prohibit municipalities from offering mitigation services, broadband services. perspective, it is not necessarily the way i think about competition. reaction tot your that particular suggestion from the chairman. anyone? steve? >> do you want the government in the gasoline business? do you want the government in the grocery does ms.? -- the grocery business? do you want the government in the wireless business? i don't think so. i don't think the government that is rigged -- regulating business should be competing in that business. toon't think it's going happen. >> municipalities are creations of state law.
5:55 pm
is a proposition of dubious constitutionality to think that the fcc somehow would have the authority to preempt a state law prescribing what a municipality, which it created, can and cannot do. hope they would be very cautious. it is not just unwise, as steve mentioned, but i think it is probably not constitutional for them to do this. and i think it would create an uproar across the country. you would have at least 20 plus state ag's that would go to court to defend their state laws. >> i would quickly commend people who are following this to a paper that was issued last week or the week before. diana carew, who is an economist at ppi, did a study where there is need for public funding will stop and along with edward rendell -- and i think arnold
5:56 pm
schwarzenegger was involved with this group. america, iing for think, or america's future. that we have ag massive underfunded quarter infrastructure need in this country. and when you hear ed rendell talk about it, he talks about the panama canal apparently being used completely drenched so these can -- these huge tankers can come through. and on our eastern seaboard, there are only two ports that are big enough to accommodate these big tankers. so all of that commerce is going up to canada. i love canada, but i would like to see some of those jobs stay here. and the amount of delayed investment in roads and ports in is reallyhis country scary. what her paper looked at was the fact that there is plenty of private capital going into broadband. we have this incredible shortfall of state and local and
5:57 pm
federal funding in the core infrastructure that the country needs. >> for member when i asked you initially what troubles you most potentially, possibly about the new chairman, maybe we could put that into the troubled category. let's switch gears and talk about spectrum, spectrum, spectrum. which we did talk about a limited earlier. specifically talk now about the process that the fcc is going through to develop option.r that because i think you'll agree, i suspect, that in order to spectrum -- ins
5:58 pm
order to provide services, spectrum is a key input. as you know, t-mobile and sprint suggest that somehow the rules be fashioned in a way -- and i don't want to put words in their mouth he cut there are different ways you could say this. "win" enoughhey spectrum to remain competitive. i want to turn to my friends over at free press and give you this quote as well, and then have you respond to questions about specifically structuring the bennett -- the bidding in a way that limits the amount of spectrum a company can gain. said, "while no qualified entity should be barred from participating in the ,pcoming auction -- auction clear, transparent, and fair
5:59 pm
limitations on how much low-frequency spectrum anyone barier can acquire do not participation." bey said that rules can structured "to allow all interested bidders a legitimate chance of winning the spectrum, they need to deliver wireless services." how do you respond to that question, for the fcc to develop rules in the auction? jim, do you want to go first? >> i was trying to kick it to james. x james, do you want to go first? [laughter] --he may want to rebound rebuffed me. i don't know. t-mobile wants a stake in the auction. i don't fault them for that. i would be very surprised if the fcc actually went in that
6:00 pm
direction. the congress directed the fcc to conduct an option, not an allocation. what t-mobile is really arguing for is an allocation. moreover, i think it would raise serious policy questions if the fcc were to go into this auction with the intention of rewarding companies for ithave been very clear that is entirely appropriate for there to be reasonable limits and the auction on what any one company can purchase. to applyits ought equally to everyone and i think that was also what congress intended when it passed the law. it was very clear in the provision that it wanted the auction open to everyone. i think if the fcc went down the path that t-mobile is arguing for, not only would it be
6:01 pm
unfair and would call into question whether they were following congressional intent, i think it would be setting the auction up to fail. somehow everybody is ifsing the point of auctions you are supposed to go into it with inhibitions and restrictions on certain participants. i am hopeful that people will see their few for what it is -- their view for what it is. >> james, i am going to turn to you. stevet let -- i made that resolve this and have the last word and we will move onto another question. do you want to say anything? >> i look forward to getting. -- bidding.
6:02 pm
>> i knew you were a man with deep pockets. [applause] have diverses opinions on spectrum auctions and all the proceeding that will take place. the solution to all of this is spectrum soate the that everyone gets some spectrum. we don't have to have these fights over the little bit of spectrum that is coming out. the auction that is teed up isht now in the next year something less than 300 megahertz. forpresident has called 500. let's get 500 out there and start investigating where the other two wondered megahertz of spectrum is going on that. it should not take somewhere between nine and 12 years to get spectrum auction. this industry does not operate that way. if we can accelerate the process to get more spectrum to auction,
6:03 pm
a lot of these other debates will go away. >> ok. i know earlier someone mentioned the question which is also in these auctions concerning allocation of license versus unlicensed spectrum. i know i said i was going to come back to it. i want to do it quickly. rebecca, i think you said your piece earlier but if you want to say anything about how the commission should go about this process of licensed or unlicensed auction you can do so now. think -- look, i think the important thing for all of us to has licensedt only spectrum have a tremendous american success story so has unlicensed spectrum.
6:04 pm
this is not a proposition. we need to ensure that we have the input necessary to allow both licensed economy to grow as well as the unlicensed economy. we have seen tremendous consumer benefits as a result of that. i think we are very encouraged by the action teed up later this month and the five gigahertz proceeding that the fcc has shown some real leadership in. band oflves opening up a five gigahertz to allow us to coexist with licensed users and developer will that will permit that. the fact is we all know we have more wireless devices out there. we have more intensity of use as people migrate from just looking at webpages to wanting to watch videos as well. we don't see any signs of that hockey stick stopping.
6:05 pm
we are fully us if we don't figure out a strategy that will allow both licensed and unlicensed to grow. we are encouraged by this first step the commission is going to take, but it is a first step. we are going to need to continue to try and keep this engine running. >> i applaud what he said. as long there is not interference. that is the only issue that is a concern for the wireless industry. >> we are going to switch gears a bit and talk about the video area and what is happening in that space. in case some of you may not of heard, there is a merger proposed between comcast and time warner cable. ago maybe.r weeks
6:06 pm
that will provide a context in which we can talk about the video marketplace and maybe the broader -- broadband marketplace, tooo. i am going to ask rebecca this question because she happens to be from comcast so she will get first stab and then maybe another panel member will have a reaction. i will invoke my friends again in the public interest of respondy and ask you to to what they claim to be their concerns because they have said -- i am just going to tell you what i read in the press. then i am going to ask you to respond. they say that this merger ought to be stopped or perhaps conditioned because the combined company would exercise too much dominance in the video
6:07 pm
marketplace and also the broadband marketplace. they claim this merged company will have a power to stifle diversity and news information services, spiteful development of over-the-top online services, raise prices for multi channel video services, maybe other things. do you agree? [laughter] we have all watched this cycle before and i think in the very early days of a transaction being announced, there is a lot of noise and high-level rhetoric. i think everybody looks forward to getting deeper into a lot of the issues. view, i thinkof ist the transaction itself
6:08 pm
-- people need to remember, it is not horizontal concentration. it is an expansion of a presents which really a very limited sets of issues. in this particular case, there will be a lot of benefits that will accrue to the consumers that are in the time warner territory which is where the footprints stand. comcast -- i think everybody would recognize has been a leader in our industry in terms of innovation. it will be able to bring those services and speed that we provide to broadband customers to the time warner cable customers over time. on the video side of things, we have a lot of new really quite good products in terms of user interface. x1 platform is incredible. we have a deep bench of video
6:09 pm
that is available and a lot of other video innovation and services that we can also extend to the time warner cable footprint. the simple fact is that times have changed. the regional model of cable footprints just is not tenable any longer because the companies we are competing against cap national footprints. it is important to be able have that scale, not just to do things like increased the speed of broadband but also do the things that are hidden behind the scenes. we were a leader in in cyberning, we lead security. you need to have a base in which to spread that research and development. we are able to do -- a lot of focus is on residential. it is important to look to have what is happening to the business services that do not have much from the advocacy
6:10 pm
groups'attention but i think it is incredibly important for economic growth and development. we can bring more competition to verizon and at&t and the services they provide businesses across those footprints which is important. you get this benefit without decreasing competition. services. be no fewer it probably would increase competition. those folks have said there is no incentive to keep on upgrading, investing among our companies, i think they're being proven wrong. this -- not taken a position on the merger but i have quoted and maybe to the discomfort of my friends up here, my other friends over at free press throughout the anding -- i will say this
6:11 pm
many in the audience know it as well. at the time of the proposed aol-time warner merger -- because i was actively writing and trying to think back then. some of the stadium -- same statements used about dominance -- if that merger were allowed to go forward in terms of really taking over the internet, taking over the video marketplace. it is almost the same language that was used then. i quote at length it's quite a bit in some of our blogs. some of you may remember what happened to the aol and time warner so i would throw that out. craig to ask if jim or have any quick comments on this merger. if any concerns that you might have. we will turn to a final question and then try to get a question or two from the audience.
6:12 pm
>> our chairman spoke at the investors conference and what i learned is that usually don't need to expand upon the things he says. >> what did he say? expand.on't have to >> it is a matter of public record. >> anyone else want to say anything? here is what we are going to do. i'm going to ask this final question. i said earlier i wanted to get reactions concerning a new communications act. line in oursecond conference theme. prettygoing to do this quickly because that can be the subject of a whole other conference. i will make this promise that we will do a whole another conference at an appropriate time. i will go down the line and give me just almost in bullet form
6:13 pm
two or three points that you would like to suggest assuming there may be one if you think that is appropriate what a new act should focus on. i will start with craig and we will go down the line quickly. haverket technologies changed are medically since the were first written in 1934 and even in 1996. rely much on possible -- as regulation. build your platform around consumers, not around technologies. technologies will change, protection of the consumer should be the first principle. silos andchnology focus on consumer protection and competition. >> steve. >> service.
6:14 pm
on service, not platform. focus on enforcement, not regulation. focus on predictability and have a bias for markets, not regulation. respect toeas with disabled or things like 911 or other emergency services, they should be competitively neutral. in the pastoo often years at cc has felt its mission is to regulate. that is not true. its mission is to anticipate and address problems. regulation is the toll that used to do that. i think they have gotten away from that. any new law that the congress ought to be very specific about what problems it wants the at cc to address -- fcc to address. it ought to circumscribe them getting this broader authority to act in the public interest. i think that might be necessary in the days of the monopoly, i
6:15 pm
don't think that broader grant of authority which is allowing them to do just about anything that they want or feel they could justify publicly. i think they ought to be very clear, very specific and defined the mission clearly. >> james. >> i think that recognition of technological convergence and embrace of service competition and a result that comes out in the form of a more simpler structure focused on the consumer protection. >> rebecca. >> i agree with everything. i will quote to other people. the key thing they need to do is recognize the world changes so fast. all the dynamic competition that we talk about means that you cannot predict where things are going. there was an event last week where two men were talking about
6:16 pm
that the points were changing fast. the last thing you need is prophylactic rules. i will channel and then you spoke of this event amid the constant -- made the caution of the where of the sweet nothings. benign edicts get played. we have to beware of the not so sweet nothings. >> thank you. we definitely need to have an other seminar or event. we will drill down a little more deeply on what a new act should look like and a preview of coming attractions. panelld mention the next we will have david radel and john chiang.
6:17 pm
they're the two lead staff persons that are working on this process to develop a new medication act -- communications act. it is an update, not a rewrite. we are pleased that you guys are going to be with us then. we could do so much more. this has been so much fun. i probably just got time maybe for two quick questions. it if i have any questions, raise your hand. we will bring a mike. c. you have to identify yourself and just ask a question without making a statement. scott. to the gentleman who professes not to be a gentleman but i know is a detriment. the procompetitive
6:18 pm
development of lte andy l growth of wi-fi -- and the outgrowth of wi-fi changing the dynamic because we have wireless capacity and the u.s. is leading in lte deployment. over the top, especially now with the court blessing two-sided markets, good people give a comment on how competition is addressing a lot of the video and broadband issues because more competition is on the way. >> who would like to comment quickly? agreed with you to the extent that consumers has more choices available than ever before and the increasingly have the power to select the video choices that meet their needs. i would say the communications choices that they want to use
6:19 pm
whether it is at&t or verizon or whatsapp. that is one of the greatest benefits of convergence we have seen and i don't expect that to slow down anytime soon. >> i think you find most of the industry, particularly at&t, we really embrace over-the-top. i think that is a real good andple of how competition the market really addresses concerns that in the past motivated regulation. when the net neutrality started, one of the arguments was like companies like ours would never embrace over-the-top. the opposite is the case. not only have we embraced it, but frankly, we make good money at it. >> craig. when verizon first announced
6:20 pm
we were raising let. te, it was controversial. a lot of people thought the devices would not be there. this was a successful platform that only came about because we had this competitive environment. it could have failed, it turned out to exceeding. you need that type of environment where everybody is experimenting and you end up with these kinds of platforms. >> one last question. whitest comcast get it both ways? they argue it is only local replace the competitor, we don't eliminate a competitor. then comcast will say it is a national market, why shouldn't we look it as a national market instead of the local market that you say scaling? -- failing? >> i'm not sure i follow the
6:21 pm
question. >> you just said that comcast says the merger should be looked at in a regional basis, a market by market basis. comcast does not replace time warner. it replaces time warner but does not replace a competitor. then you say you need to scale to compete nationally. why shouldn't the reviewers looked at as a national marketplace instead of the local marketplace? looks like comcast is talking out of both sides of its mouth. >> from a competition perspective, those are different conversations. >> the regulators are going to look at both. doj and the fcc look at all the different markets. any emerging party is going to affect. i think what you


disc Borrow a DVD of this show
info Stream Only

Uploaded by TV Archive on